Investigation Overview
July 18, 2014 (Update) - On July 15, 2014, a report was published that alleged that nearly 33% of USANA Health Sciences, Inc. sales and 50% of its revenue growth stemmed from 'widespread illegal MLM operations in China.' Furthermore, the report stated, that 'USANA Health Sciences, Inc. is one of the most egregious violators of China's 'anti-pyramid scheme laws' which effectively prohibit MLM's primary business model -- multi-level compensation schemes for recruiting and enrolling new sales agents' and that 'USANA Health Sciences, Inc. doesn't even own a retail license in China for neutraceutical product; its entire mainland operation for distributing them requires the charade of Hong-Kong sales associates who actually live and operate in mainland China.'
Shares of USANA Health Sciences, Inc. declined from $79.60 per share on July 14, 2014 to $72.10 per share during July 16, 2014.
January 28, 2014 (Update) - On January 3, 2014, the Federal Trade Commission (FTC) announced it will hold a press conference on January 7, 2014 to announce an initiative against 'deceptive adverting of weight-loss products,' without naming the products or manufacturers. The FTC announcement included the sub-title 'From Food Additives to Skin Cream to Dietary Supplements, FTC Cracks Down.' On January 7, 2014 the FTC charged four companies with deceptively marketing. In this round of the crackdown, the FTC came down on Sensa Products, LOccitane, HCG Diet Direct, and LeanSpa. The four companies will collectively pay $34 million to refund consumers, but they neither admitted nor denied fault in the case.
Shares of USANA Health Sciences, Inc. (NYSE:USNA) declined from $78.29 per share in late December 2013 to $57.37 per share on January 16, 2014.
July 25, 2013 (Shareholders Foundation) - An investigation on behalf of current investors in shares of USANA Health Sciences, Inc. (NYSE:USNA) was announced concerning whether certain officers and directors of USANA Health Sciences, Inc. possibly breached their fiduciary duties.
The investigation by a law firm concerns whether certain USANA Health Sciences officers and directors breached their fiduciary duties and caused damage to the company and its shareholders by, among other things, failing to implement adequate internal controls.
USANA Health Sciences, Inc. reported that its Total Revenue rose from $436.94 million for the 12 months period that ended on Jan. 2, 2010 to $648.73 million for the 12 months period that ended on Dec. 29, 2012 and that its respective Net Income increased from $33.56 million to $66.43 million.
Shares of USANA Health Sciences, Inc. (NYSE:USNA) grew from under $31 in December 2012 to as high as $87.34 per share on July 22, 2013.
Then on July 23, 2013, USANA Health Sciences, Inc. disclosed that the Securities and Exchange Commission (SEC) is conducting an investigation, which appears to involve possible issues regarding trading in the Companys stock during late 2012 by certain of the Company's directors, including the Chairman.
Shares of USANA Health Sciences, Inc. (NYSE:USNA) declined from over $87 per share on July 22, 2013 to $72.93 per share on July 24, 2013.